B.C. to file legal challenge of contentious Canada oil pipe expansion

VANCOUVER (Reuters) - The government of British Columbia said on Wednesday it would file a legal challenge of Kinder Morgan Canada Ltd’s contentious Trans Mountain pipeline expansion by month-end, even as a poll showed mounting public support for the project.

The West Coast province will file a reference case that asks the B.C. Court of Appeal to determine whether it has the jurisdiction to stop the C$7.4 billion ($5.9 billion) expansion, which was approved by the federal government in 2016.

The legal process will tie the project up in court past the May 31 deadline set earlier this month by Kinder Morgan to scrap the expansion unless all legal and jurisdictional challenges are resolved.

The Trans Mountain expansion, which would see a near tripling of capacity on an existing pipeline from Alberta to B.C.’s coast, has pitted Ottawa and the oil-rich province of Alberta against B.C. Some say it could turn into a constitutional crisis, derail Prime Minister Justin Trudeau’s energy strategy and dent business confidence.

“I think the challenge is that you’re not going to have a final answer to a question like this, no matter how quickly parties move, for many, many months,” said Michael Feder, a corporate litigator with McCarthy Tétrault.

A decision by the B.C. court could be challenged in Canada’s Supreme Court, dragging any resolution into 2019, he said.

The B.C. government’s latest move comes as public support for its actions is waning. Two out of three Canadians now say B.C. is wrong to try to block the build, according to a poll by the Angus Reid Institute, a 10-percentage-point increase since February. In B.C., support for the pipeline has risen since the last poll.

“There’s no question the needle is moving on this issue,” said Shachi Kurl, executive director of the polling firm.

Trudeau was confronted by environmental activists in London on Wednesday who erected a fake pipeline around the Canadian High Commission in the British capital to protest the project.

Following a series of delays, Kinder Morgan said earlier this month it was halting most work on the project.

Shares of Kinder Morgan Canada were up 2.6 percent at C$17.96, as the broader energy index rallied.

Texas-based Kinder Morgan Inc and its Toronto-listed subsidiary are set to release first-quarter results and hold a conference call after markets close on Wednesday.